Union Government has notified the merger of commodities market regulator Forward Markets Commission (FMC) with Securities Exchange Board of India (SEBI) with an effect from 28 September 2015.
In this regard, Union Finance Ministry has issued a notification mentioning that
- Regulation of Commodity Derivatives Market will shift to SEBI under Securities Contracts Regulation Act (SCRA) 1956.
- Forward Contracts Regulation Act (FCRA), 1952 gets repealed so does the FMC cease to exist.
With this merger, all three national and six regional commodity exchanges will come under the ambit of national capital market regulator SEBI.
Implication: This merger will create a unified regulator for commodities and capital markets which in turn will help streamline monitoring of commodity futures trading and curb wild speculations in the market.
- Union Finance Minister Arun Jaitley in his Budget speech of February 2015 had announced the merger of FMC with the capital market regulator SEBI in order to strengthen the regulation of commodity futures market.
- The Financial Sector Legislative Reforms Commission (FSLRC) also had recommended merger of SEBI, IRDA, FMC and PFRDA into a single entity called Unified Financial Agency (UFA).